Janet Yellen, the US Treasury Secretary, arrived in Guangzhou on Thursday to press Beijing over concerns that the country’s industrial subsidies for green energy, cars and batteries could overwhelm the global market with inexpensive goods, according to RFI.
Yellen’s trip to China followed a phone call between President Joe Biden and Chinese leader Xi Jinping this week. The two leaders clashed over US trade restrictions but stated they hoped relations would normalise.
The finance minister’s plane landed around 6 p.m. local time (10 a.m. GMT) in Guangzhou, where she was welcomed by US Ambassador to China Nicholas Burns and Chinese officials.
The trip was aimed at delivering Washington’s message to President Xi’s inner circle of decision makers, a Treasury Department spokesman indicated. Yellen also plans to talk to economic experts and the US business community in Guangzhou, a southern city that symbolises China’s manufacturing power.
US concerns about the competitive impact of Chinese subsidies that could arise in key sectors, such as solar panels and electric vehicles, will be on the agenda. Beijing’s support for sectors of steel and aluminium had previously “led to substantial overinvestment and excess capacity that Chinese firms looked to export abroad at depressed prices,” Yellen stated last week.
Now, we see excess capacity building in ‘new’ industries like solar, EVs [electric vehicles], and lithium-ion batteries.
The European Union announced this week an investigation targeting two Chinese solar panel manufacturers accused of receiving subsidies. Asked about the US own subsidies to green energy industries, a Treasury spokeswoman stated that US efforts did not risk flooding the global market, noting that the scale of Chinese subsidies was “much larger.”
Yellen is also scheduled to meet with Chinese Premier Li Qiang and Vice Premier He Lifeng, as well as central bank governor Pan Gongsheng and Finance Minister Lan Fo’an.
Beijing and Washington have clashed in recent years over sensitive issues ranging from technology and trade to human rights, as well as the self-governing island of Taiwan and the South China Sea. Relations partially stabilised after Presidents Biden and Xi met in San Francisco in November for talks that both sides described as a qualified success.
US Secretary of State Antony Blinken is expected to make another trip to China in the coming weeks, a sign that the two sides are returning to more conventional interactions.
